Agilent Cuts 4,000 Jobs, Outlook Glum
{{#rendered}} {{/rendered}}Communications testing equipment and microchip maker Agilent Technologies Inc. said on Thursday it would eliminate 4,000 jobs, doubling previously announced cuts, and pushed back hopes of a business recovery for half a year or more.
Agilent reported an operating loss of $275 million, or 60 cents per diluted share, hitting the Wall Street consensus calculated by Thomson Financial/First Call but 183 percent down from the year-ago quarter's profit of $328 million, or 71 cents per share.
Net revenue fell 47 percent, to $1.6 billion from $3.0 billion.
{{#rendered}} {{/rendered}}``We've never seen anything fall so fast and go so deep,'' Chief Executive Ned Barnholt said in an interview, comparing the current downturn to 6 previous ones he has weathered at Agilent and its former parent, Hewlett-Packard Co.
The company noted falling orders for semiconductors and testing equipment and gave a glum outlook. It also said it planned to offer $1 billion of debt even as Standard & Poor's downgraded its corporate rating to BBB-minus from BBB-plus.
``These latest cost-cutting actions -- coupled with strong new product introductions and entry into new markets -- are intended to return Agilent to profitability sometime during our third fiscal quarter of 2002, independent of how much improvement we see in the industry and the economy at large,'' Barnholt said in a statement.
{{#rendered}} {{/rendered}}``We are expecting to be relatively flat in the next couple of quarters,'' he said in the interview, referring to sales.
Agilent had used salary cuts to address the downturn in business, a combination of the slowing economy and inventory overhang at communications industry customers who had expected recent rocket growth to continue.
But Barnholt said he had to cut back given the severity of the slowdown and despite the family-style management heritage of HP's founders.
{{#rendered}} {{/rendered}}``In these circumstances I think Dave Packard and Bill Hewlett probably would take similar measures if they felt it was important to the financial health and security of the company,'' he said.
Net earnings for the quarter, including a $1 billion pretax gain from the sale of Agilent's health care business, fell to $197 million, or 43 cents per diluted share, from $305 million, or 66 cents per share.
Fourth-quarter net orders dropped to $1.2 billion, down 56 percent from the year-ago quarter's $2.7 billion, off 8 percent from the previous quarter. That included about $250 million of order cancellations, about the same level as the previous quarter.
{{#rendered}} {{/rendered}}Agilent saw first quarter revenue between $1.25 billion and $1.4 billion, with an expected loss, excluding restructuring charges, of between 40 and 60 cents per share.
Earlier this week, the company said its Chief Financial Officer Robert Walker would leave the company to explore other interests, and would be replaced by Adrian Dillon, who had been executive vice president and chief financial and planning officer at Eaton Corp.